Working in Ecuador

The Republic of Ecuador is not just known for its rich ecology and as the first nation to recognise legally enforceable rights of the ecosystem or also called as Rights of Nature but also for its growing economy. Though this country is still classified under middle-income, many expats still chose to seek employment in its land.

Ecuador has recovered significantly after the almost crippling effect of the 1998 to 1999 recession. Since then, the economy managed to grow annually by 5%, and as of 2016, this country generated a total nominal Gross Domestic Product of USD 109.759 billion which is 64th in the GDP global ranking. This country also boasts a well-trained pool of professionals and an excellent educational system that both serve as the backbone of its competitive job market. Ecuador, in reality, is not as famous as its neighbours Peru, Argentina and Brazil when it comes to destinations expats usually consider. However, it remains a considerable option for those who want to seek employment in one of the most promising, yet often overlooked countries in South America.

Job Market

Ecuador has a total labour force of 6.779 million. Half of the country’s population is employed in the Services sector, accounting for 53.6%, followed by the agriculture industry at 27.6% and industry at 18.8%. Foreign nationals hoping to find a job in Ecuador can try their luck in the English-teaching sector as this has one of the highest demands for employees at the moment. Translators with proven fluency in Spanish are also in demand. Some of the other jobs where foreign nationals can apply for are the sports teacher, tourist guide, and jobs that require employees to speak English for international clients such as bartenders, cashiers, or waiter/waitress in bars.

Since the official language of Ecuador is Spanish, expats will need to have a good working knowledge of the language, as this is the medium of communication in most Ecuadorian businesses on a daily basis. There are only a handful of companies in Ecuador that use English as their language at work, mostly multinational companies or major businesses operating in the tourism sector.

Average Salary and Work Hours

In December 2016, President Rafael Correa announced that the country’s minimum wage will finally be able to cover every individual or family’s basic needs. The Ministry of Labour declared a minimum wage of $366 which is the second highest minimum salary calculated in dollars in Latin America (next to Argentina). Ecuador also has the highest minimum wage in the region whereas the current hourly wage is USD 2.48 while in Columbia it is at USD 1.63 and Peru is at USD 1.32 per hour. On top of that, the President also said that the local government will provide incentives that’ll help boost the employment including flexibility in labour contracts, refinancing of tax and social security debts.

The standard work week in Ecuador is eight hours a day or forty hours per week. Major businesses, offices and establishments start work at 8:30 AM and end the day at 4:30 PM. However, this still varies depending on the type of job and industry an employee is working at. All workers are entitled to 9 public holidays, 15 days of paid vacation yearly, Christmas bonus, school bonus, and profit sharing.

Income Tax in Ecuador

The income tax system in Ecuador is based on a progressive scale. It starts at 5% and can go as high as 35%. For tax purposes, an individual is considered a resident in Ecuador if they have stayed in the country for more than half of the tax year. Meanwhile, non-residents are subject to taxes only on their Ecuador-sourced income.

Taxable Income in USD

Tax Rate (%)

0-10,800

0

10,800-11,730

5

13,770-17,210

10

17,210-20,670

12

20,670-41,330

15

41,330-61,980

20

61,980-82,660

25

82,660-110,190

30

110,190 and over

35

Work Culture

Machismo is still heavily felt in Ecuador not just inside the home but also in the work environment. To this day, men are still the breadwinner and the women usually stay at home to tend to the kids. Most high-position roles in local companies are also dominated by men and expats need to understand this practice is quite deep rooted whereas Ecuadorians are raised and taught that men and women have different roles in the society.

Handshake is the most common and formal way of greeting in Ecuador. However, some locals embrace or do abrazo (pat on each shoulder) especially if they are meeting a friend or long time colleague. It is advisable for expats to just shake hands with direct eye contact unless their Ecuadorian counterparts move to a more informal level. Always address them using Senor or Senora followed by the person’s last name. Remember, only friends and family address each other on a first name basis.

Gift giving is also a common practice in Ecuador. When invited to dine out or dinner at one of your colleague’s house, make it a practice to bring pastries, good quality spirits or flowers to the hosts. Roses are well received but avoid lilies or marigolds since those are used to funerals. Also, never give knives, scissors or anything sharp because it will mean that you want to severe the relationship.